With more restriction in China and South Korea, Japan seems to embrace the digital currencies.
In stark contrast to its neighbors China and South Korea, who are increasing efforts to ban ICO’s and the trade in digital currencies, The Financial Services Agency (FSA) in Japan approved 11 companies to operate cryptocurrency exchanges in the country.
Exchanges are now allowed to operate without a license up until this point but regulating the industry will aid in the fight to combat fraud, while still keeping innovation alive.
FSA officials say:
“With the new regulation, Tokyo aims to balance the need to protect investors with the need to support fintech innovations.”
To obtain a license, companies have to adhere to a number of strict requirements, including segregation of customer accounts and building strong computer systems.
Industry officials believe that this move will further strengthen Japan’s position as the top Bitcoin trading hub, along with the government’s recognition of Bitcoin as official legal tender back in April this year.
It can also be seen as an effort to avoid another Mt.Gox scandal. The Tokyo based Bitcoin exchange was the biggest in the world until $480 mln went missing and founder Mark Karpeles decided to cease operations back in 2014. He stood on trial for embezzlement and data manipulation.
The FSA said it is reviewing a further 17 license applications from hopeful exchange operators seeking approval.